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Is it likely that side-chain support will be added to Bitcoin? As I understand it, side-chain support will require a hard fork to Bitcoin to support this functionality:

  1. "moving" BTC to external blockchain-based currencies,
  2. for each of these currencies, keeping a counter of how much BTC has been moved to that currency, and
  3. allowing BTC to be moved back into the Bitcoin blockchain (which decrements the counter).

Part #1 is (and has been) supported without a hard fork, using addresses like 1BitcoinEaterAddressDontSendf59kuE , but part #3 is critical for side-chain support and requires a hard fork.

I understand that it will be extremely difficult to have a hard fork on such a large cryptocurrency. What is the likelihood that it can be done?

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Yes, it is very likely that Bitcoin will support side chains within the next few years. (By my guess, not 2015 but maybe 2016.) Side chain support does not require a hard fork---it only requires a soft fork. As the sidechains paper explains (page 10, final paragraph):

To use Bitcoin as the parent chain, an extension to script which can recognise and validate such SPV proofs would be required. At the very least, such proofs would need to be made compact enough to fit in a Bitcoin transaction. However, this is just a soft-forking change, without effect on transactions which do not use the new features.

Note that Bitcoin doesn't need a special counter to keep track of value sent to child chains---it already keeps track of every spendable balance. Sending bitcoins to a side chain will be essentially the same as sending money to any other bitcoin address---except that you'll need a special tool to create the transaction for you. Receiving bitcoins back from the side chain will also require the special tool, but that tool will just create a transaction that spends one or more of the transactions previously sent to the side chain. (Note that the tool will need to operate on both the side chain and the Bitcoin block chain to maintain consistency.)


As an aside, hard forks are only as difficult as it is to convince people to upgrade. The most recent hard fork, the August 2013 fork mentioned in BIP50, was relatively easy because it was a fix for an acknowledged major bug. On the other hand, Gavin Andresen will likely soon be proposing a hard fork to increase block size that may be quite difficulty because it's a major change to how Bitcoin has worked since 2010.

Pegged side chains falls somewhere in between those two extremes (and it is only a soft fork), so I guess it will "only" take about 3 months of discussion and testing once a patch/BIP is proposed and about 6 months to fully rollout the soft fork, similar to the rollout of BIP34.

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  • Given that it is 2020, perhaps this answer should be updated to explain why it hasn't happened yet. Commented Jan 20, 2020 at 17:39

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